Unfortunately based on the information you have provided, it is not clear how exactly you are graying out the not-selected items, and highlighting the selected one.
I have attached an example project. I also enabled the Hover Interactivity Setting, which I believe produces the result you need (only except that it is activated on hover, and not on click).
It would be helpful, if you could:
1. Confirm if this is the effect you need
2. Provide a modified version of this project, demonstrating your custom coloring logic
the Telerik team